The federal government and the Canadian dairy industry are vowing to protect the countryB次元官网网址檚 supply management system in the face of threats from the United States.

But some observers, and even some who work in the industry, say Canada will have to consider changes to the decades-old system that controls the supply of dairy products to appease a combative Trump administration.

Earlier this week, U.S. President Donald Trump voiced discontent about American access to Canadian dairy markets, which was a major sticking point in North American free-trade negotiations during his first term in office.

B次元官网网址淐anada is very tough. TheyB次元官网网址檙e very, very tough to do business with, and we canB次元官网网址檛 let them take advantage of the U.S.,B次元官网网址� he told reporters on Monday. B次元官网网址淭hey donB次元官网网址檛 take our agricultural product for the most part, our milk and dairy, etc. A little bit they do, but not much. We take theirs.B次元官网网址�

Hours later, Prime Minister Justin Trudeau announced he had reached an agreement with Trump to pause proposed 25 per cent tariffs on Canadian exports for at least 30 days, in exchange for commitments to beef up border security and fight the fentanyl trade.

But itB次元官网网址檚 unclear what will happen once that month elapses. In addition, the Canada-United States-Mexico Agreement, signed in 2018, will be up for review next year. As part of the free-trade deal, Canada agreed to allow U.S. dairy farmers access to about 3.5 per cent of the domestic market, but the U.S. has since accused Canada of violating the pact.

B次元官网网址淲e will certainly see a fight. It will be a titanic battle,B次元官网网址� said Lawrence Herman, an international lawyer and senior fellow at the C.D. Howe Institute. B次元官网网址淭he Americans are bound to challenge supply management.B次元官网网址�

Howard Lutnick, TrumpB次元官网网址檚 pick to lead the Commerce Department, also singled out the dairy industry during his Senate confirmation hearing last week.

B次元官网网址淐anada B次元官网网址� treats our dairy farmers horribly. ThatB次元官网网址檚 got to end,B次元官网网址� he said. B次元官网网址淚B次元官网网址檓 going to work hard to make sure B次元官网网址� they do much, much better in Canada than theyB次元官网网址檝e ever done before, and that is a key focus of this administration.B次元官网网址�

On Tuesday, Foreign Affairs Minister M茅lanie Joly told reporters the government will defend Canadian dairy producers. B次元官网网址淲e have always said that we would protect supply management,B次元官网网址� she said. B次元官网网址淭he Liberal party is the party that put supply management in place, we are the ones who protected it during the last (free-trade) renegotiation, and weB次元官网网址檒l be there to protect it.B次元官网网址�

CanadaB次元官网网址檚 system of supply management for dairy, poultry and eggs was established starting in the 1970s following a period of price volatility. It functions by setting production quotas for farmers, guaranteeing minimum prices and maintaining import controls.

Luc Boivin, general manager of Fromagerie Boivin in QuebecB次元官网网址檚 Saguenay region, said the Americans have good reason to be unhappy with some elements of the system, including a lack of transparency about how minimum prices are fixed.

B次元官网网址淚 think supply management will be protected in Canada,B次元官网网址� he said in an interview. B次元官网网址淏ut I think it will have to be modernized.B次元官网网址�

He pointed to the fact that Canada agreed during the 2018 trade talks to scrap separate classes for certain milk ingredients that allowed producers to sell them at lower prices and made American equivalents uncompetitive.

However, U.S. officials have since claimed that Canada has effectively replaced those classes with a new one that continues to violate the principle of the trade pact. B次元官网网址淚 think this time the Americans will arrive much more prepared B次元官网网址� at the negotiating table,B次元官网网址� Boivin said.

Herman went further, claiming the U.S. could demand major concessions on the dairy market. B次元官网网址淚 think that there will be serious, serious pressure from the Americans for Canada to not only give American dairy exporters greater access, but to do away with supply management entirely,B次元官网网址� he said.

Charles Langlois, president of a Quebec industry group representing dairy producers, said that as far as heB次元官网网址檚 aware, supply management is not currently on the table during tariff talks with the United States.

Concessions made during recent trade deals with the United States, the European Union and Pacific Rim nations have already opened about 10 to 12 per cent of the Canadian dairy market to other countries, he said.

B次元官网网址淲e want to ensure that our supply management system is not affected, because it ensures a stable environment for the industry, it ensures a good product for consumers and good prices,B次元官网网址� Langlois said.

Boivin said his four-generation family business has already felt the impact of those concessions, thanks to increased competition from imported cheeses. B次元官网网址淲e are not currently growing,B次元官网网址� he said.

In 2023, the House of Commons passed a bill tabled by the Bloc Qu茅b茅cois that would have protected the supply-managed dairy, egg and poultry markets from future trade concessions. The legislation had broad support from all parties, but faced pushback in the Senate and died when Trudeau prorogued Parliament last month.

Herman called the bill B次元官网网址渁ppalling,B次元官网网址� especially when Canada is facing a B次元官网网址渃risis of major proportionsB次元官网网址� with the U.S. B次元官网网址淚tB次元官网网址檚 a reflection of the egregious hold that the dairy farmers of Canada have on politicians in Ottawa,B次元官网网址� he said. B次元官网网址淎nd ultimately, itB次元官网网址檚 about votes.B次元官网网址�

Doing away with supply management, he said, would remove a major trade irritant and allow Canadian producers to compete internationally.

But Jodey Nurse, a faculty lecturer at the McGill Institute for the Study of Canada, said Canadian farmers would struggle to survive if supply management were scrapped. B次元官网网址淲e would be flooded with dairy products, egg products and poultry products from the United States and elsewhere,B次元官网网址� she said. B次元官网网址淎nd I do think that thereB次元官网网址檚 just no way that the Canadian producers would be able to compete.B次元官网网址�

She believes TrumpB次元官网网址檚 tariff threats will strengthen CanadiansB次元官网网址� resolve to defend the domestic dairy industry. B次元官网网址淚 think most Canadians and most people recognize that food is not just another widget,B次元官网网址� she said. B次元官网网址淔ood is something that needs to be protected.B次元官网网址�